3/20/22

STOCKS –ARKK,

MACRO – SPY, TLT, 2s, 5s, 10s

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• RTM: Powell The Hawk
• RTM Tactical Update: Expecting A Surge In Volatility
• RTM: The Importance Of The Fed Balance Sheet To Stocks
• RTM: Stock Rally Missing Key Ingredients For Longevity
• RTM: Markets Come To Critical Resistance Region
• RTM: Tracking Options Trades And Delta Hedging [Edu. Content]

Stocks finished flat today, which was unexpected, and followed the recent 4-day rally pattern nicely, which has led to a period of sideways consolidation of about the same length.

S&P 500 (SPY)

The S&P 500 finished flat and was saved by a decent market on close buy imbalance, which helped propel the index higher in the final 10 minutes of trading. But the more important underlying story is that the gap at 4,480 was filled and, for the moment, rejected. That’s important to note.

2s

Today, Powell was the driving force for markets as he reiterated his stance on monetary policy at a Q&A session and indicated that hikes of more than 50 bps were possible. It was also more than evident that inflation comes before economic growth. It sent yields soaring across the curve, more specifically at the front of the curve. The 2-yr rate rose to around 2.12% and is now within striking distance of the 2.2% level we have focused on.

5s & 10s

Additionally, the 10 yr and 5 Year spread is now negative at -0.03%.

20+ Yr Treasury ETF (TLT)

The TLT had a bad day, making it the lowest close since the summer of 2019. At this point, the odds for a drop back to $125 seems like they have increased.

ARKK (ARKK)

Meanwhile, the market was back to selling the ARKK ETF today, which finished down 2.8% on the day. I like to watch the ARKK ETF because it seems to lead the rest of the market, at least in my observation. I have noticed that once the ETF starts to get dumped, it can act as a leading indicator for the rest of the market. In the meantime, it is trading around the downtrend at $63.50.

Anyway, we will see what tomorrow shall bring.

Mike